More Money Is Just The Beginning...

Some financial experts say more people foreclosing on their homes could mean fewer people filing for bankruptcy, but recently there’s been a spike in the number of Iowans filing bankruptcy.

In 2005, a record high 18,000 Iowans filed for bankruptcy, before the law changed and made it a more difficult process. In 2006, there was a drastic decline in the number of bankruptcies filed, with 4,700.

Metro malls are boasting Black Friday crowds of record proportions and retailers are enjoying billions of dollars in sales from the holiday weekend. However, on the other side of the cash register, Americans are now more in debt than ever before.

Retailers may be optimistic after this weekend, but all is not well on the nation’s economic front. In fact, it is a downright dangerous time of year for many Iowa shoppers, who have already racked up thousands of dollars in credit card debt.

An Ankeny mother is shocked after receiving a credit card application in the mail recently for her son Greg. At the age of seven, Greg Eshuis gets an allowance, can sign his name, and apparently sign up for a line of credit.

Financial experts say credit card offers for everyone from kids to family pets are not uncommon these days. Unfortunately, these offers often fall into the wrong hands. Adam Carroll of Four Legacies Mortgage says the offers are abused by parents or anyone else who has access to a child’s information. “We’ve come across some early 20 year-olds who are just getting out of college and wanting to go out and buy their first home or first car, and they’re realizing there’s an unpaid collection on their credit report from a credit card that they have no knowledge of,” he said.

Carroll says the best way for people to protect themselves is to check their credit reports on a regular basis. Parents should also be sure to check their kids’ credit reports. To obtain three free credit reports each year, check out www.annualcreditreport.com.

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The Iowa Journal examines financial literacy — what it is, why Americans may have to change their spending and savings habits, and how to navigate today’s financial downturn.